ESG and Stakeholder Capitalism: The Unseen Threat to Freedom of Speech?

by | Jul 6, 2023 | CROWDSOURCE™ | 0 comments

As ESG and Stakeholder Capitalism gain unprecedented global influence, concerns around their potential misuse are escalating. Often hailed as principles fostering ethical business practices, these concepts are now being scrutinised for their potential to compromise democratic values. This article delves into how ESG and Stakeholder Capitalism silence political dissent, particularly with instances of debanking seen in the UK banking industry.

The recent debanking incidents involving Nigel Farage, former UK Independence Party leader, and Rev Richard Fothergill, an Anglican vicar, have raised concerns about the fundamental freedom of speech and political expression. Notably, Farage was debanked by Coutts, and subsequently denied accounts by other banks, while Fothergill saw his account closed by the Yorkshire Building Society. What seemed like isolated incidents initially started to appear as a pervasive pattern within the banking industry.

Upon closer examination, an underlying factor contributing to these episodes can be traced back to the Environmental, Social, and Governance (ESG) criteria. ESG was coined in the 90s as a framework for companies to evaluate the sustainability and ethical impact of their operations.

Environmental factors assess a company’s impact on the environment and its response to issues like climate change and resource use. Social factors gauge a company’s influence on people, encompassing their treatment of employees, their engagement with the community, and their adherence to human rights practices. Governance factors scrutinise the company’s leadership, transparency, and accountability.

ESG’s influence has been increasingly permeating various sectors, including banking. The Yorkshire Building Society, the institution responsible for closing Fothergill’s account, signed up to the United Nations Environment Programme Finance Initiative (UNEP FI) and its Principles for Responsible Banking in January 2023. This commitment aligns their business operations with societal goals expressed in international norms and agreements.

The World Economic Forum (WEF), with its expansive network of companies, governments, and banks, is one of the most significant champions of ESG. The forum’s agenda is closely aligned with Stakeholder Capitalism, an economic model that insists companies should consider communities as stakeholders, as well as shareholders. This model has been promoted extensively by Klaus Schwab, the founder of the WEF.

Failing to maintain a good ESG score can result in companies becoming ostracised. Other notable UK banks, such as Barclays, Lloyds, Coventry Building Society, Nationwide, NatWest, and Skipton Business Finance, have also shown a clear commitment to ESG and related initiatives, including the UN’s Agenda 2030. HSBC, though not a signatory to the UNEP FI, has expressed full commitment to ESG.

As we connect the dots, we begin to see that these debanking episodes are not isolated incidents but manifestations of a wider global agenda. The intertwining of finance and political expression, dictated by the principles of ESG, has far-reaching implications. The emerging pattern, where individuals can be cut out of the banking system, and by extension, modern society, for expressing dissent against these ideologies, is deeply concerning.

Freedom of speech and political expression, fundamental to democratic societies, is at stake. The evidence suggests that it is not just the banking industry, but our society as a whole, that is being reshaped by the global influence of ESG and its associated principles.

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